VALHI REPORTS FOURTH QUARTER 2017 RESULTS

DALLAS, TEXAS . . March 15, 2018.  Valhi, Inc. (NYSE: VHI) reported increased net income from continuing operations attributable to Valhi stockholders of $141.1 million, or $.41 per diluted share, in the fourth quarter of 2017 compared to $15.5 million, or $.05 per diluted share, in the fourth quarter of 2016.   For the full year of 2017, Valhi reported net income from continuing operations attributable to Valhi stockholders of $316.7 million, or $.93 per diluted share, compared to $8.1 million, or $.02 per diluted share in the full year of 2016. 
Valhi reported increased net income attributable to Valhi stockholders in the 2017 periods primarily due to the improved operating results of its Chemicals Segment and a net income tax benefit related to various items discussed below. On January 26, 2018 Valhi completed the sale of its Waste Management Segment, the results of operations of which have been reclassified to discontinued operations for all periods presented.

The Chemicals Segment's net sales of $453.3 million in the fourth quarter of 2017 were $119.6 million, or 36%, higher than in the fourth quarter of 2016.  The Chemicals Segment's net sales of $1.7 billion in the full year of 2017 were $364.7 million, or 27%, higher than in the full year of 2016.  The Chemicals Segment's net sales increased in 2017 due to higher average TiO2 selling prices and higher sales volumes.  The Chemicals Segment's average TiO2 selling prices were 27% higher in the fourth quarter of 2017 as compared to the fourth quarter of 2016 and were 22% higher in the full year of 2017 as compared to 2016.  With higher prices in all major markets, average selling prices at the end of the fourth quarter of 2017 were 5% higher than at the end of the third quarter of 2017 and were 27% higher than at the end of 2016.  TiO2 sales volumes in the fourth quarter of 2017 were 5% higher as compared to the fourth quarter of 2016 due to higher sales in the European, North American and Latin American markets partially offset by lower sales in export markets.  TiO2 sales volumes in 2017 were 5% higher than in 2016 due to strength in the North American and European markets.  The Chemicals Segment's sales volumes in the fourth quarter and full year of 2017 set new overall records for a fourth quarter and full-year period.  Fluctuations in currency exchange rates (primarily the euro) also affected net sales comparisons, increasing net sales by approximately $18 million in the fourth quarter of 2017 and by approximately $16 million in the full year of 2017 as compared to the same periods in 2016.  The table at the end of this press release shows how each of these items impacted the overall increase in sales.

The Chemicals Segment's operating income in the fourth quarter of 2017 was $119.2 million as compared to $45.2 million in the fourth quarter of 2016.  For the full year 2017, the Chemicals Segment's operating income was $341.1 million as compared to $91.0 million in 2016.  The Chemicals Segment's operating income increased in the 2017 periods primarily due to higher average TiO2 selling prices and higher sales and production volumes partially offset by higher costs for certain raw materials and other production costs.  The Chemicals Segment's TiO2 production volumes were 2% higher in the fourth quarter and 5% higher in the full year of 2017 as compared to the same periods in 2016.  The Chemicals Segment production facilities operated at full practical capacity utilization rates in 2017 compared to approximately 98% in 2016.  The Chemicals Segment's production volumes in the fourth quarter and full year of 2017 set a new overall record for a fourth quarter and full-year period.  Fluctuations in currency exchange rates also affected operating income comparisons, which increased operating income by approximately $1 million in the fourth quarter and decreased operating income by approximately $18 million in the full-year period.

The Component Products Segment's net sales decreased $1.2 million, or 5%, in the fourth quarter of 2017 as compared to the same period, and operating income decreased from $4.1 million in the fourth quarter of 2016 to $2.7 million in the fourth quarter of 2017.  The Component Products Segment's net sales and operating income decreased in the fourth quarter of 2017 compared to the same period in 2016 primarily due to security products sales to a single government customer which, as expected, did not recur in the fourth quarter of 2017.  The Component Products Segment's net sales for the full year of 2017 increased $3.1 million or 3% primarily due to security products sales to an existing government security customer, predominately during the first half of 2017, partially offset by a decline in sales of security products to an original equipment manufacturer of recreational transportation products.  Operating income declined slightly from $15.6 million in 2016 to $15.2 million in 2017 due to relative changes in customer and product mix and to a lesser extent higher raw material costs for security products and higher manufacturing costs for marine components.
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The following information was filed by Valhi Inc (VHI) on Thursday, March 15, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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